We're told time and time again about the importance of having an emergency fund, yet an alarming number of Americans aren't listening. According to a GoBankingRates study conducted earlier this year, 69% of Americans have less than $1,000 in savings. But it's not just fresh-out-of-college 20-somethings who are bringing those numbers down. Among seniors 65 and older, just 37% claim to have $1,000 available in savings. Furthermore, only 23% of seniors have managed to accumulate $10,000 or more. And while not having emergency savings is a problem at any age, it's a particularly frightening prospect for older Americans.


Relying too heavily on Social Security

Retirees tend to put a lot of faith in Social Security, and while it serves as a key financial lifeline for many seniors, that was actually never its intention. Social Security is only designed to replace about 40% of the average worker's preretirement income, but most seniors need almost double that amount once they leave the workforce. Furthermore, while Social Security is a steady source of retirement income for countless older Americans, it cannot and should not take the place of independent savings.

Saving for the unexpected

So just how much should seniors set aside for emergencies? Younger workers are told that their emergency funds should contain three to six months' worth of living expenses so that they'll be covered in the event of a job loss. Seniors have it a bit differently since there's no expectation of income in retirement -- that, and the fact that Social Security pretty much provides a guaranteed income stream once you're old enough to claim it.

That said, if you're retired, you still need to have some money set aside for emergencies, and the exact amount depends on your circumstances. There's no magic formula that applies universally, but there are two major sources of financial stress to consider when trying to come up with a number: healthcare and housing.

Healthcare costs can really add up

Medical care can be a major financial burden for retirees, and unfortunately, many seniors underestimate the amount they'll spend once they're no longer working. According to data compiled by HealthView Services, a provider of healthcare cost-projection software, the average healthy 65-year-old couple retiring this year should expect to spend $377,000 on healthcare costs in retirement.

And that's just the average healthy couple. If your health isn't great, you may want to pad your emergency fund to account for the possibility of being hospitalized or requiring extensive treatment. Even if you are in pretty good heath for your age, you still never know when you might fall, break a bone, and require surgery. It's better to prepare for the unknown than risk running out of cash at a time in your life when you're already financially vulnerable.

Your home is getting older, too

Another major expense seniors face is housing, and believe it or not, the burden is often higher for retirees who actually own their homes outright. Even without a mortgage payment, owning a home in retirement means shelling out money for real estate taxes, homeowners' insurance, maintenance, and repairs, all while living on a fixed income. Most homeowners spend 1% to 4% of their homes' value each year on maintenance and repairs, but if you have an older home, that number might jump even higher. Having extra emergency savings is the best way to protect yourself from whatever issues your aging home inevitably presents, whether it's a cracked foundation, a leaky roof, or a furnace just begging to be replaced.

Now if you're wondering whether your retirement savings, like your IRA or 401(k), can count as an emergency fund, the answer is yes -- but with a caveat. Your emergency fund must be accessible, which means you need to have some money in cash form. If you have cash sitting in your retirement account along with a host of other investments, then that's money you can fall back on. But you shouldn't count on cashing out investments like stocks, bonds, or mutual funds to cover an emergency. You could wind up taking a huge loss as a result of bad timing.

No matter your age, you just never know when a financial emergency might strike. Having that extra cash on hand could be one of the smartest money moves you'll ever make going into retirement.